Acacia Research Reports First Quarter Financial Results

  Acacia Research Reports First Quarter Financial Results

Business Wire

NEWPORT BEACH, Calif. -- April 18, 2013

Acacia Research Corporation^(1) (Nasdaq: ACTG) today reported results for the
three months ended March31, 2013.

  *Revenues in the first quarter of 2013 were $76,861,000, as compared to
    $99,040,000 in the comparable prior year quarter.
  *GAAP net income in the first quarter of 2013 was $5,113,000, or $0.11 per
    diluted share, as compared to GAAP net income of $49,928,000, or $1.09 per
    diluted share for the comparable prior year quarter.
  *Non-GAAP net income in the first quarter of 2013 was $22,710,000, or $0.47
    per diluted share, as compared to $67,755,000, or $1.48 per diluted share
    for the comparable prior year quarter. See below for information regarding
    non-GAAP measures.
  *Trailing twelve-month revenues as of the end of the first quarter of 2013
    were $228,548,000, as compared to $222,617,000 as of the end of the prior
    year quarter.

“Acacia generated the second highest revenue quarter in company history in the
1st Quarter of 2013, providing a great start to the year,” commented CEO, Paul
Ryan. “These results reflect Acacia's growing industry leadership in patent
licensing and are accelerating new opportunities to partner with patent
owners.”

Consolidated Financial Results - Overview

Financial highlights and operating activities during the periods presented
included the following:

                                                Three Months Ended March 31,
                                                  2013             2012
                                                                     
Revenues (in thousands)                           $   76,861         $  99,040
Net income (in thousands)                         $   5,113          $  49,928
Non-GAAP net income (in thousands)                $   22,710         $  67,755
Diluted earnings per share                        $   0.11           $  1.09
Pro forma non-GAAP net earnings per common        $   0.47           $  1.48
share - diluted
New agreements executed                           29                 40
Licensing and enforcement programs generating     31                 32
revenues
Licensing and enforcement programs with           11                 6
initial revenues
New patent portfolios                             9                  5
                                                                     

As of March31, 2013, trailing twelve-month revenues were as follows (in
thousands):

As of Date:          Trailing Twelve-     % Change
                       Month Revenues^(*)
                                              
March 31, 2013         $    228,548           (9   )%
December 31, 2012      $    250,727           22   %
September 30, 2012     $    205,258           (12  )%
June 30, 2012          $    233,355           5    %
March 31, 2012         $    222,617           21   %
* Includes “other operating income.”


As of March31, 2013, on a consolidated basis, we have generated revenues from
154 technology licensing and enforcement programs, as compared to 118 programs
as of the end of the prior year quarter.

Summary Financial Results
For the Three Months Ended March31, 2013 and 2012

Revenues (in thousands):
                                                   
                       Three Months Ended March 31,     Change
                       2013             2012          $             %
                                                                        
Revenues               $   76,861         $ 99,040      $ (22,179 )     (22 )%
                                                                        
New revenue            29                 40
agreements
Licensing programs
generating             31                 32
revenues
Licensing programs
with initial           11                 6
revenues
                                                                        

Revenues in the first quarter of 2013 decreased $22,179,000, or 22%, to
$76,861,000, as compared to $99,040,000 in the comparable prior year quarter.
In the first quarter of 2013, three licensees individually accounted for 65%,
14% and 13% of revenues recognized, as compared to three licensees
individually accounting for 54%, 20% and 18% of revenues recognized during the
first quarter of 2012.

Cost of Revenues (in thousands):
                                                      
                          Three Months Ended March 31,     Change
                          2013             2012          $           %
                          
Inventor royalties        $   18,481         $  7,594      $ 10,887      143 %
Contingent legal fees     15,032             3,748         11,284        301 %
                                                                             

First quarter 2013 total revenues, less inventor royalties expense and
contingent legal fees expense was $43,348,000, or 56% of first quarter 2013
revenues, as compared to $87,698,000 or 89% in the comparable prior year
quarter. The decrease in total revenues, less inventor royalties expense and
contingent legal fees expense as a percentage of total revenues was primarily
due to a significantly higher percentage of revenues recognized during the
three months ended March 31, 2012 having no corresponding inventor royalty or
contingent legal fee obligations, as compared to the revenues recognized
during the three months ended March31, 2013.

The economic terms of the patent portfolio acquisition agreements and
contingent legal fee arrangements, if any, including royalty rates, if any,
contingent fee rates, if any, and other terms, vary across the patent
portfolios owned or controlled by our operating subsidiaries. These expenses
fluctuate period to period, based on the amount of revenues recognized each
period, the terms and conditions of revenue agreements executed each period
and the mix of specific patent portfolios with varying economic terms and
characteristics generating revenues each period.

                         Three Months Ended March 31,   Change
                           2013            2012           $          %
                                                                         
Litigation and
licensing expenses -       $   9,648         $  3,381       $ 6,267      185 %
patents
                                                                             

Litigation and licensing expenses-patents in the first quarter 2013 increased
due primarily to higher net levels of patent portfolio litigation, litigation
support, prosecution, third-party technical consulting and professional expert
expenses associated with our continued investment in ongoing and new licensing
and enforcement programs commenced since the end of the comparable prior year
quarter. We expect patent-related legal expenses to continue to fluctuate
period to period in connection with our current and future patent acquisition,
development, licensing and enforcement activities.

                         Three Months Ended March 31,   Change
                           2013             2012          $          %
                                                                         
Amortization of            $   11,730         $  5,126      $ 6,604      129 %
patents
                                                                             

First quarter 2013 non-cash patent amortization charges increased due
primarily to $5.9 million of scheduled amortization expense related to new
patent portfolios acquired since the end of the comparable prior year quarter.

Other Operating Expenses (in thousands):
                           
                              Three Months Ended March 31,   Change
                              2013            2012           $         %
                                                                           
Marketing, general and        $  8,693          $ 8,641        $ 52        1 %
administrative expenses
Non-cash stock
compensation expense -        5,158            5,090         68         1 %
MG&A
Total marketing, general
and administrative            $  13,851        $ 13,731      $ 120      1 %
expenses
                                                                             

First quarter 2013 marketing, general and administrative expenses including
non-cash stock compensation expenses were relatively flat, as compared to the
first quarter of 2012.

Income Taxes:
                      
                         Three Months Ended March 31,   Change
                         2013           2012            $           %
                                                                        
Provision for income     $  (3,272  )     $ (14,747 )     $ 11,475      (78 )%
taxes (in thousands)
Effective tax rate       39         %     23        %
                                                                        

Tax expense for the first quarter of 2013, as compared to the prior year
quarter, included the impact of the following:

  *Our estimated annual effective tax rate for the three months ended March
    31, 2013 was approximately 39%. The effective tax rate for the three
    months ended March 31, 2012, including the impact of discrete items, was
    23%. Discrete items were primarily comprised of $10.2 million of tax
    benefits recognized resulting from the release of valuation allowance on
    the majority of our net deferred tax assets in the first quarter of 2012.
  *Noncash tax expense calculated without the excess benefit related to the
    exercise and vesting of equity-based incentive awards, which was credited
    to additional paid-in capital, not taxes payable, totaled approximately
    $709,000 and $7.6 million for the three months ended March 31, 2013 and
    2012, respectively.
  *As of March 31, 2013, taxes paid or payable totaled approximately $3.4
    million, primarily comprised of $2.2 million of foreign withholding taxes
    withheld by the applicable foreign tax authority on revenue agreements
    executed with third party licensees domiciled in certain foreign
    jurisdictions, and federal and other state related taxes payable. The 2012
    tax provision contemplates utilization of the $2.2 million in foreign
    taxes withheld in the first quarter of 2013 as a credit against income tax
    expense calculated for financial statement purposes.

Financial Condition (in thousands)

Summary Balance Sheet Information:
                                                        
                                          March 31, 2013     December 31, 2012
                                          
Cash & cash equivalents and               $    327,448       $     311,279
investments
Accounts receivable                       45,351             9,843
Total assets                              714,532            668,717
Accounts payable and accrued expenses     17,127             9,485
/ costs
Royalties and contingent legal fees       36,736             12,508
payable
Total liabilities                         82,188             50,239
                                                             

Summary Cash Flow Information:
                                 
                                    Three Months Ended March 31,
                                    2013            2012
                                                      
Net cash provided by (used in):
Operating activities                $  16,825         $ 48,952
Investing activities                (48,214    )      (276,886 )
Financing activities                2,746             228,699
                                                               

Patent Acquisition Costs. Patent related acquisition costs in the first
quarter of 2013 totaled $4,010,000, as compared to $152,100,000 (including the
$150,000,000 purchase of ADAPTIX, Inc., net of cash acquired) during the
comparable prior year quarter. See “Business Highlights and Recent
Developments” below for a summary of patent portfolio acquisitions during the
current quarter.

Refer to the section below entitled “Summary Financial Information” for
additional summary consolidated balance sheet, statements of operations and
cash flow information as of and for the applicable periods presented.

INFORMATION ABOUT NON-GAAP FINANCIAL MEASURES

As used herein, “GAAP” refers to accounting principles generally accepted in
the United States of America. To supplement our consolidated financial
statements prepared and presented in accordance with GAAP, this earnings
release includes financial measures, including (1) non-GAAP net income and (2)
non-GAAP Earnings Per Share (“EPS”), that are considered non-GAAP financial
measures as defined in Rule 101 of Regulation G promulgated by the Securities
and Exchange Commission. Generally, a non-GAAP financial measure is a
numerical measure of a company's historical or future performance, financial
position, or cash flows that either excludes or includes amounts that are not
normally excluded or included in the most directly comparable measure
calculated and presented in accordance with GAAP. The presentation of this
non-GAAP financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information prepared and
presented in accordance with GAAP.

We use these non-GAAP financial measures for internal financial and
operational decision making purposes and as a means to evaluate
period-to-period comparisons of the performance and results of operations of
our core business. Our management believes that these non-GAAP financial
measures provide meaningful supplemental information regarding the performance
of our core business by excluding non-cash stock compensation charges,
non-cash patent amortization charges and excess benefit related non-cash tax
expense, that may not be indicative of our recurring core business operating
results. These non-GAAP financial measures also facilitate management's
internal planning and comparisons to our historical performance and liquidity.
We believe these non-GAAP financial measures are useful to investors as they
allow for greater transparency with respect to key metrics used by management
in its financial and operational decision making and are used by our
institutional investors and the analyst community to help them analyze the
performance and operational results of our core business.

Non-GAAP Net income and EPS.We define non-GAAP net income as net income
calculated in accordance with GAAP, plus non-cash stock compensation charges,
non-cash patent amortization charges and excess benefit related non-cash tax
expense. Non-GAAP EPS is defined as non-GAAP net income divided by the
weighted average outstanding shares, on a fully-diluted basis, calculated in
accordance with GAAP, for the respective reporting period.

Due to the inherent volatility in stock prices, the use of estimates and
assumptions in connection with the valuation and expensing of share-based
awards and the variety of award types that companies can issue under FASB ASC
Topic 718, management believes that providing a non-GAAP financial measure
that excludes non-cash stock compensation allows investors to make meaningful
comparisons between our recurring core business operating results and those of
other companies, as well as providing our management with a critical tool for
financial and operational decision making and for evaluating our own
period-to-period recurring core business operating results. Similarly, due to
the variability associated with the timing and amount of patent acquisition
payments and estimates inherent in the capitalization and amortization of
patent acquisition costs, management believes that providing a non-GAAP
financial measure that excludes non-cash patent amortization charges allows
investors to make meaningful comparisons between our recurring core business
operating results and those of other companies, and also provides our
management with a useful tool for financial and operational decision making
and for evaluating our own period-to-period recurring core business operating
results. Lastly, for financial reporting purposes, tax expense is required to
be calculated without the excess tax benefit related to the exercise and
vesting of equity-based incentive awards, however, the deduction related to
the exercise and vesting of equity-based incentive awards is available to
offset taxable income on our consolidated tax returns. Accordingly, the
non-cash tax expense calculated without the excess benefit for financial
statement purposes is credited to additional paid-in capital, not taxes
payable, and does not represent a cash tax obligation. Management believes
that providing a non-GAAP financial measure that excludes excess benefit
related non-cash tax expense allows investors to asses our net results and the
economic impact of income taxes based largely on cash tax obligations, make
more meaningful comparisons between our recurring core business net results
and those of other companies, and also provides our management with a useful
tool for financial and operational decision making and for evaluating our own
period-to-period recurring core business net results.

There are a number of limitations related to the use of non-GAAP net income
and EPS versus net income and EPS calculated in accordance with GAAP. For
example, non-GAAP net income excludes significant non-cash stock compensation
charges, non-cash patent amortization charges and excess benefit related
non-cash tax expense that are recurring, and will continue to be recurring for
the foreseeable future. In addition, non-cash stock compensation is a critical
component of our employee compensation programs and non-cash patent
amortization reflects the cost of certain patent portfolio acquisitions,
amortized on a straight-line basis over the estimated economic useful life of
the respective patent portfolio, and may reflect the acceleration of
amortization related to recoupable up-front patent portfolio acquisition
costs. Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from non-GAAP net income and
EPS and evaluating non-GAAP net income and EPS in conjunction with net income
and EPS calculated in accordance with GAAP.

The accompanying table provided below provides a reconciliation of the
non-GAAP financial measures presented to the most directly comparable
financial measures prepared in accordance with GAAP.

                ______________________________________________

A conference call is scheduled for today. The Acacia Research presentation and
Q&A will start at 1:30 p.m. Pacific Time (4:30 p.m. Eastern).

To listen to the presentation by phone, dial (888) 646-0797 for domestic
callers and (706) 758-6764 for international callers, both of whom will need
to enter the conference ID 22540962 when prompted. A replay of the audio
presentation will be available for 30 days at (855) 859-2056 for domestic
callers and (404) 537-3406 for international callers, both of whom will need
to enter the Conference ID 22540962 when prompted.

The call is being webcast by CCBN and can be accessed at Acacia's website at
www.acaciaresearch.com.

ABOUT ACACIA RESEARCH CORPORATION

Acacia Research Corporation's subsidiaries partner with inventors and patent
owners, license the patents to corporate users, and share the revenue. Acacia
Research Corporation's subsidiaries control over 250 patent portfolios,
covering technologies used in a wide variety of industries.

Information about Acacia Research Corporation and its subsidiaries is
available at www.acaciaresearchgroup.com and www.acaciaresearch.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995

This news release contains forward-looking statements within the meaning of
the “safe harbor” provisions of the Private Securities Litigation Reform Act
of 1995. These statements are based upon our current expectations and speak
only as of the date hereof. Our ability to become the licensing partner for
companies, and our actual results may differ materially and adversely from
those expressed in any forward-looking statements as a result of various
factors and uncertainties, including the effect of the global economic
downturn on technology companies, the ability to successfully develop
licensing programs and attract new business, rapid technological change in
relevant markets, changes in demand for current and future intellectual
property rights, legislative, regulatory and competitive developments
addressing licensing and enforcement of patents and/or intellectual property
in general and general economic conditions. Our Annual Report on Form 10-K,
recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports
on Forms 8-K and 8-K/A, and other SEC filings discuss some of the important
risk factors that may affect our business, results of operations and financial
condition. We undertake no obligation to revise or update publicly any
forward-looking statements for any reason.

The results achieved in the most recent quarter are not necessarily indicative
of the results to be achieved by us in any subsequent quarters, as it is
currently anticipated that Acacia Research Corporation's financial results
will vary, and may vary significantly, from quarter to quarter. This variance
is expected to result from a number of factors, including risk factors
affecting our results of operations and financial condition referenced above,
and the particular structure of our licensing transactions, which may impact
the amount of inventor royalties and contingent legal feesexpenses we incur
period to period.

ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION
(In thousands, except share and per share information)
(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                              
                                                 Three Months Ended March 31,
                                                 2013           2012
                                                                  
Revenues                                         $  76,861       $  99,040  
Operating costs and expenses:
Cost of revenues:
Inventor royalties                               18,481           7,594
Contingent legal fees                            15,032           3,748
Litigation and licensing expenses - patents      9,648            3,381
Amortization of patents                          11,730           5,126
Marketing, general and administrative
expenses (including non-cash stock
compensation expense of $5,158 for the three     13,851           13,731
months ended March 31, 2013, and $5,090 for
the three months ended March 31, 2012)
Research, consulting and other expenses -        1,024           1,116      
business development
Total operating costs and expenses               69,766          34,696     
Operating income                                 7,095            64,344
                                                                  
Total other income                               1,290           56         
Income from operations before provision for      8,385            64,400
income taxes
Provision for income taxes                       (3,272     )     (14,747    )
Net income including noncontrolling              5,113            49,653
interests in operating subsidiaries
Net (income) loss attributable to
noncontrolling interests in operating            —               275        
subsidiaries
Net income attributable to Acacia Research       $  5,113        $  49,928  
Corporation
                                                                  
Net income per common share attributable to
Acacia Research Corporation:
Basic earnings per share                         $  0.11         $  1.13    
Diluted earnings per share                       $  0.11         $  1.09    
Weighted average number of shares                47,859,774      44,367,499 
outstanding, basic
Weighted average number of shares                48,354,444      45,771,228 
outstanding, diluted
                                                                             
                                                                             

Reconciliation of GAAP Net Income and EPS to Non-GAAP Net Income and EPS
(In thousands, except share and per share data)
                                               
                                                  Three Months Ended March 31,
                                                  2013            2012
                                                                    
GAAP net income                                   $   5,113        $  49,928
                                                                    
Non-cash stock compensation                       5,158             5,090
Non-cash patent amortization                      11,730            5,126
Excess benefit related non-cash tax expense       709              7,611
                                                                    
Non-GAAP net income                               $   22,710       $  67,755
                                                                    
Pro forma non-GAAP net earnings per common        $   0.47         $  1.53
share — basic
Pro forma non-GAAP net earnings per common        $   0.47         $  1.48
share — diluted
GAAP weighted-average shares — basic              47,859,774       44,367,499
GAAP weighted-average shares — diluted            48,354,444       45,771,228
                                                                    
                                                                    

ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION, (CONTINUED)
(In thousands)
(Unaudited)

CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION

                                                March 31,     December 31,
                                                  2013            2012
ASSETS
Current assets:
Cash and cash equivalents                         $ 193,161       $   221,804
Short-term investments                            134,287         89,475
Accounts receivable                               45,351          9,843
Prepaid expenses and other current assets         5,101          3,441
Total current assets                              377,900         324,563
                                                                  
Property and equipment, net of accumulated        536             339
depreciation and amortization
Patents, net of accumulated amortization          305,809         313,529
Goodwill                                          30,149          30,149
Other assets                                      138            137
                                                  $ 714,532      $   668,717
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses / costs     $ 17,127        $   9,485
Royalties and contingent legal fees payable       36,736         12,508
Total current liabilities                         53,863          21,993
                                                                  
Deferred income taxes                             27,831          27,831
Other liabilities                                 494            415
Total liabilities                                 82,188          50,239
Total stockholders’ equity                        632,344        618,478
                                                  $ 714,532      $   668,717
                                                                      
                                                                      

ACACIA RESEARCH CORPORATION
SUMMARY FINANCIAL INFORMATION, (CONTINUED)
(In thousands)
(Unaudited)

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               
                                                  Three Months Ended March 31,
                                                  2013           2012
Cash flows from operating activities:
Net income including noncontrolling interests     $  5,113         $ 49,653
in operating subsidiaries
Adjustments to reconcile net income including
noncontrolling interests in operating
subsidiaries to net cash provided by
operating activities:
Depreciation and amortization                     11,773           5,158
Non-cash stock compensation                       5,158            5,090
Change in valuation allowance on deferred         —                (10,237   )
taxes
Changes in assets and liabilities:
Accounts receivable                               (35,508    )     1,635
Prepaid expenses and other assets                 (1,660     )     (919      )
Accounts payable and accrued expenses / costs     7,721            2,692
Royalties and contingent legal fees payable       24,228           (9,413    )
Deferred income tax                               —               5,293     
                                                                   
Net cash provided by operating activities         16,825          48,952    
                                                                   
Cash flows from investing activities:
Purchases of property and equipment               (241       )     (24       )
Purchase of available-for-sale investments        (97,225    )     (144,762  )
Maturities and sale of available-for-sale         53,262           20,000
investments
Purchase of ADAPTIX, Inc., net of cash            —                (150,000  )
acquired
Patent acquisition costs                          (4,010     )     (2,100    )
                                                                   
Net cash used in investing activities             (48,214    )     (276,886  )
                                                                   
Cash flows from financing activities:
Proceeds from sale of common stock, net of        —                219,084
issuance costs
Contributions from noncontrolling interests       1,920            1,920
in operating subsidiary
Excess tax benefits from stock-based              709              7,611
compensation
Proceeds from exercises of stock options          117             84        
                                                                   
Net cash provided by financing activities         2,746           228,699   
                                                                   
(Decrease) increase in cash and cash              (28,643    )     765
equivalents
                                                                   
Cash and cash equivalents, beginning              221,804         314,733   
                                                                   
Cash and cash equivalents, ending                 $  193,161      $ 315,498 
                                                                             
                                                                             

Business Highlights and Recent Developments^(2)

Business highlights of the first quarter of 2013 and recent developments
include the following:

Revenues for the three months ended March31, 2013 included fees from the
following technology licensing and enforcement programs:

•  4G Wireless Handsets technology*     •  Memory Circuit and Packaging
                                               technology*
•   Audio Communications Fraud             •   Messaging technology
    Detection technology
•   Camera Support technology              •   Mobile Computer Synchronization
                                               technology
•   Computer Architecture and Power        •   NOR Flash technology
    Management
•   Digital Imaging technology*            •   Online Auction Guarantee
                                               technology
•   Digital Signal Processing              •   Online Gaming technology
    Architecture technology
•   DMT                                    •   Pop-up Internet Advertising
                                               technology
•   Domain Name Redirection technology     •   Power Management Within
                                               Integrated Circuits technology
    Electronic spreadsheet, data
•   analysis and software development      •   Prescription Lens technology*
    technology*
•   Enhanced Mobile Communications         •   Semiconductor Memory and
    technology                                 Process technology*
•   Facilities Operation Management        •   Surgical Access technology
    System technology
•   Gas Modulation Control Systems         •   Suture Anchors technology
    technology*
•   Greeting Card technology*              •   Telematics technology
•   Improved Memory Manufacturing          •   Wireless Data Synchronization &
    technology                                 Data Transfer technology*
•   Intercarrier SMS technology*           •   Wireless Location Based
                                               Services technology*
•   Location Based Services technology
  
*   Initial revenues recognized during the three months ended March 31, 2013.
    

  *A subsidiary of Acacia Research Group LLC entered into a patent rights
    agreement with RPX Corporation.
  *Advanced Data Access LLC entered into a license agreement with Powerchip
    Technology Corporation.
  *Advanced Data Access LLC, Smart Memory Solutions LLC, and Semiconductor
    Technologies LLC entered into a settlement and license agreement with
    Micron Technology, Inc., Micron Semiconductor Products, Inc., and Micron
    Technology Texas, LLC. This agreement resolved litigation that was pending
    in the United States District Court for the Eastern District of Texas and
    the United States District Court for the District of Delaware.
  *Automated Facilities Management Corporation entered into a settlement and
    license agreement with Ventyx USA, Inc. This agreement resolved patent
    litigation that was pending in the United States District Court for the
    Northern District of Georgia.
  *Express Card Systems LLC entered into a settlement and license agreement
    with Supervalu Inc. The agreement resolved litigation that was pending in
    the United States District Court for the Eastern District of Texas.
  *Gametek LLC entered into a settlement and license agreement with 6waves
    LLC, 6waves Technologies LLC, 6waves US Inc., and Six Waves Inc. This
    agreement resolved patent litigation that was pending in the United States
    District Court for the Southern District of California.
  *HVAC Modulation Technologies LLC entered into a licensing agreement with
    Johnson Controls, Inc.
  *Smartphone Technologies LLC resolved the following legal proceedings: in
    the United States District Court for the Eastern District of Texas, Civil
    Action Nos. 6:10cv74, 6:11cv604, 6:13cv196, 6:10cv00580 and 6:11cv00561;
    in the German District Court for the District of Dusseldorf, Civil Action
    Nos. 4a O 164/12 and 4a O 82/12; in the United Kingdom High Court of
    Justice, Chancery Division Patents Court, Claim No. HC12F04972.
  *Optimum Power Solutions LLC, Data Engine Technologies LLC, Express Card
    Systems LLC, Digitech Image Technologies LLC and Intercarrier
    Communications LLC resolved the following legal proceedings: Civil Action
    No. 3:11-cv-01509-WHA previously pending in the Federal District Court for
    the Northern District of California and on appeal to the Federal Circuit;
    Civil Action Nos. 6:12-cv-00697-LED and No. 6:13-cv-00136-LED pending in
    the United States District Court for Eastern District of Texas; Civil
    Action No. 8:12-cv-02125-MRW pending in the United States District Court
    for the Central District of California; and Civil Action No.
    3:12-cv-00764-JAG pending in the United States District Court of the
    Eastern District of Virginia, respectively.
  *Telematics Corporation entered into a settlement and license agreement
    with Webtech Wireless Inc. This agreement resolved patent litigation that
    was pending in the United States District Court for the Northern District
    of Georgia.
  *Unified Messaging Solutions LLC entered into a license agreement with
    CenturyLink, Inc. This agreement resolved patent litigation that was
    pending in the United States District Courts for the Eastern District of
    Texas and the Northern District of Illinois.
  *Unified Messaging Solutions LLC entered into a license and settlement
    agreement with Charles Schwab Corporation. This agreement resolved patent
    litigation that was pending in the United States District Court for the
    Northern District of Illinois.
  *Unified Messaging Solutions LLC entered into a license and settlement
    agreement with Morgan Stanley. This agreement resolved patent litigation
    that was pending in the United States District Court for the Northern
    District of Illinois.
  *Unified Messaging Solutions LLC entered into a settlement and license
    agreement with Radio One, Inc. This agreement resolved patent litigation
    that was pending in the United States District Court for the Southern
    District of New York and the Northern District of Illinois.
  *Unified Messaging Solutions LLC and Charter Communications, Inc. entered
    into a Release Agreement which resolves all disputes between the parties
    currently pending in the United States District Court for the Northern
    District of Illinois, Case No. 12C6286.
  *Acacia Research Group LLC and its affiliates continued their patent and
    patent rights acquisition activities, acquiring a total of 9 new patent
    portfolios in the first quarter of 2013, including the following:

       *In January 2013, obtained a patent relating to core fiber optic
         network architectures.
       *In January 2013, obtained rights to a patent portfolio relating to
         oil and gas production and will share licensing revenue with the
         patent owner. The portfolio comprises 4 US and 27 foreign patents
         that relate to polymer based drilling fluids which are widely used in
         the drilling of oil and gas wells.
       *In January 2013, acquired patents relating to vascular device
         technology.
       *In January 2013, acquired patents relating to oil and gas production.
         The patents relate to solids separation technology which addresses
         removal of solids from drilling fluids used in oil and gas wells.
       *In February 2013, obtained rights to a portfolio of patent assets
         covering display technologies. The set of patents involved in this
         transaction relate to certain display technologies used in
         smartphones, tablets, computers, HDTVs and other devices.

_______________________

       As used herein, “Acacia Research Corporation,” “we,” “us,” and “our”
       refer to Acacia Research Corporation and/or its wholly and
^(1)  majority-owned operating subsidiaries. All intellectual property
       acquisition, development, licensing and enforcement activities are
       conducted solely by certain of Acacia Research Corporation's wholly and
       majority-owned operating subsidiaries.
       
       Acacia Research Group LLC, Advanced Data Access LLC, Automated
       Facilities Management Corporation, Data Engine Technologies LLC,
       Digitech Image Technologies LLC, Express Card Systems LLC, Gametek LLC,
^(2)   HVAC Modulation Technologies LLC, Intercarrier Communications LLC,
       Optimum Power Solutions LLC, Smart Memory Solutions LLC, Semiconductor
       Technologies LLC, Smartphone Technologies LLC, Telematics Corporation
       and Unified Messaging Solutions LLC are wholly and majority-owned
       operating subsidiaries of Acacia Research Corporation.

Contact:

Acacia Research Corporation
Rob Stewart
Investor Relations
Tel 949-480-8300
Fax 949-480-8301
or
SpecOps Communications
Adam Handelsman
President & Founder
212-518-7721
adam@specopscomm.com